Entrepreneurship policy in the Nordic countries - perspectives of the development since 2003

Entrepreneurship policy in the Nordic countries - perspectives of the development since 2003

Publisert 03.03.2008

Sist oppdatert 22.06.2011

This report is a follow-up study on what has happened in the area of Entrepreneurship policy in the Nordic countries over the past five years. The results presented are mainly based upon changes observed from a previous report published in 2003 (See link below). In brief, the situation in the different countries as described in the 2003 report has been compared with how it can be seen in 2008. The objective is to give a brief overview of the most important changes that have taken place in the area of Entrepreneurship policy.

Overall conclusions

Politicians are questioning the efficiency of existing policy measures mainly due to lack of proper evaluations

One of the remaining problems in the policy area is how to know the effects and efficiency of different measures taken. Even if we can observe increasing values for different indicators such as the number of start-ups or the number of individuals interested in becoming entrepreneurs, we don’t know to what extent such changes can be related to policy measures taken. As has also been stated in Lundström, Almerud and Stevenson, 2008 there is an urgent need for more systematic evaluations.

Nordic countries have a high share of their budget in R&D related activities

There are large resources invested in R&D related activities. Many such investments are done in what can be seen as the area of Innovation policy. However, an increasing interest can be observed for investment in innovative entrepreneurship. This increase means that the issues of entrepreneurship and innovation are going to be more integrated in the future. To some extent this is already true for Iceland and Denmark.

There is a lack of policy relevant research and communication between researchers and politicians

We can observe an increasing interest for policy-relevant research but this it has still not lead to forums for communication between researchers and politicians, at least not on a national level. We can expect such forums to be developed in the future, due to an increasing interest in the type of measures that should be used in Entrepreneurship policy. In Denmark and Sweden such issues are mainly taken care of in the system’s organizational structure.

There is an increasing interest in quantitative objectives and benchmarking

The countries have all put more quantitative objectives in place over the last few years, i.e. the 25% reduction in costs of administrative burdens up to 2012, a specified percentage increase in the number of start-ups, or, like Denmark, benchmarking themselves against the best performers for the main objectives.

We can see a top down approach

The Entrepreneurship policy is, to a large extent, a top down approach, meaning that the policy measures are decided at Ministry level and carried out through central agencies and their regional networks. However, we can observe an increasing importance in measures taken at regional level and an increasing role for municipalities. One reason being the EU structural funds, with another being that in many municipalities an increasing interest could be seen how to develop entrepreneurship in the local environment. Therefore, we should expect more of the decision-making in the Entrepreneurship policy area to be done on regional and local levels in the future. In this respect, the future roles of central agencies will be an import topic for discussion.

Create a policy based upon real needs from entrepreneurs rather than myths

Analysing policy measures taken, they are more or less all about the supply side. Few studies are done that really look in to the demand side. One reason being that in a vast number of different financing programs exist, as well as a large number of counselling projects, just to mention two examples. The policy area consists of a high number of projects which have probably been developed by the so-called supply industry rather than out of a real demand from entrepreneurs and SMEs.

Create a policy based upon a Nordic perspective

The Nordic countries are all becoming more globalized than before, meaning that they will develop different, important markets and networks based upon the strength in their existing and future industry. Furthermore, many of the context indicators differ in each Nordic country meaning that if a policy were to be built upon existing contexts we should expect Entrepreneurship policy to be different in each Nordic country.

There are some factors that could, on the other hand, been seen as arguments for a more Nordic perspective in the policy area. One such important factor is that the countries have large public sectors and high taxes, perhaps with the exception of Iceland. The countries are regarded as so-called welfare states. This could be one additional argument for finding policy measures on how to deal with such a situation. Another factor is the importance of foreign markets as each country has a small domestic market and is therefore dependent on foreign trade. A third factor could be the high standard of living and a fourth factor that these are scarcely populated countries. Finally, all countries have a high interest in creating innovative entrepreneurship.

Integrate Innovation and Entrepreneurship policy measures

This is a proposition that has already been stressed. The problem has been dealt with, to a large extent, in Lundström, Almerud and Stevenson, 2008. It is both about the question of technology transfer and innovative development in existing companies, not least SMEs. It is also about how to integrate measures taken to develop innovation systems and entrepreneurial behaviour.